Alibaba’s Jack Ma reappears in public and shakes hands with Xi Jinping. Relaunch of Chinese high tech
Alibaba Group founder Jack Ma disappeared from the public eye in late 2020 after making critical remarks about China's financial regulatory system. He resurfaced briefly in early 2021 during a video call with rural teachers , but has remained out of the spotlight for several years, until now .
Goldman's Philip Sun wrote a note to clients overnight titled "A picture is worth a thousand words." President Xi shook hands with Jack Ma. Buy the GS A500 inclusion basket?”.
Sun was watching CCTV Prime Time News when top CCP leaders gathered in the Great Hall of the People for a meeting with Chinese business leaders, including Jack Ma.
“I took a snapshot of President Xi shaking hands with Jack Ma, founder of Alibaba ,” the analyst said, adding: “The young man sitting to the right of Pony Ma is the founder of DeepSeek , Liang WenFeng (born 1985),” and “The young man sitting to the right of Jack Ma (with two people in the middle) is the founder of robotics company UniTree , XingXing WANG (born 1995).”
But he was also joined by other private enterprise executives who spoke at the event, including Huawei founder Ren Zhengfei, BYD founder Wang Chuanfu, New Hope Group founder Liu Yonghao, Will Semi founder Yu Renrong and Xiaomi founder Lei Jun.
The rare meeting between Ma, other Chinese tech leaders and President Xi signals the CCP's renewed confidence in the tech space after years of regulatory restrictions.
Goldman's Sun told clients: “As mentioned this morning, I believe the symposium is highly symbolic . It is another strong testimony that China's political pendulum is swinging from left (SOE) to right (POE), as highlighted in the sales note below.”
He told clients to consider “our GS A500 (GSTDA500) inclusion basket” to “gain greater exposure to Chinese A-shares.”
Ten days ago, Goldman's Hailey He informed clients that her stance on Chinese tech stocks was “cautiously optimistic ,” noting that “enthusiasm about AI sparked by Deepseek has pushed Chinese tech stocks into a bull market.”
Goldman's He provided further details on the “ cautious optimism ”:
As China returns from a week-long CNY holiday, market sentiment on Chinese assets improves, as reflected in the bullish price action of both equities and fixed income. The tariff reprieve, AI enthusiasm sparked by Deepseek, and easy liquidity have contributed to the movement .
Chinese stocks have rebounded significantly this week on AI optimism. The HSI tech, the gauge of foreigners' confidence, has risen 23% from its January lows . GS Asia research on the internet is optimistic about the further advancement of AI and cost efficiency. Notably, the cost of Doubao, the most popular AI chatbot in China, is 85% lower than the industry average . As for stocks, we continue to believe that Tencent is the best positioned company to introduce To-C AI applications, thanks to the Weixin super-app with both social and transaction capabilities.
We remain bullish on Alibaba (China's largest public cloud hyperscaler) and data centers (GDS, VNET) which will benefit from continued growth in demand for public cloud and AI computing due to the multi-year increase in AI adoption. The latest stock research article on China AI can be found here.
In a separate note, Sat Duhra, portfolio manager at Janus Henderson Investors in Singapore, told clients: “This is a sector that has been ignored, but like other purely domestic sectors, there are some bright spots,” adding: “ DeepSeek's recent announcement is a timely reminder that behind the scenes, industrial policy – for example Made in China 2025 – has pushed many sectors towards world-class status .”
Peter Milliken, an analyst at Deutsche Bank, told clients: “ We think 2025 is the year the investor world realizes that China is outpacing the rest of the world .”
“Investors, in our view, will have to pivot sharply towards China in the medium term and will struggle to access its securities without bidding up,” Milliken wrote.
Chinese politics observer Alfred Wu of the Lee Kuan Yew School of Public Policy told The Straight Times that the meeting had a dual purpose:
- face international challenges
- and domestic economic stagnation.
“It is certainly good that the government is listening to the private sector in person. But it remains to be seen whether this will lead to concrete actions that address their concerns,” Associate Professor Wu said, citing the difficulty of obtaining loans and addressing predatory behavior by local governments, such as profit-driven law enforcement.
Professor Bert Hofman, an economist at the East Asia Institute at NUS, saw the meeting as an important signal that the government will start supporting the private sector.
“China's innovation and development depend on a healthy private sector, as demonstrated by the meeting participants, all innovators in their fields. The fact that Jack Ma and Pony Ma (Tencent's CEO) attended the meeting is good news for the platform economy, which has been under regulatory scrutiny for some time,” Hofman said.
Ma's return and the CCP's renewed love for domestic tech firms come as China's rivalry with U.S. tech firms intensifies amid the ongoing artificial intelligence arms race and "great power" competition. This development is promising news for investors who have recently been snapping up cheap Chinese technology.
However , despite the rally in Chinese tech stocks and broader domestic markets, onshore stock ETFs recorded $44 billion in outflows last week, marking the largest weekly outflow this year. There is one
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Article Alibaba's Jack Ma reappears in public and shakes hands with Xi Jinping. Revival of Chinese high tech comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/jack-ma-di-alibaba-riappare-in-pubblico-e-stringe-la-mano-a-xi-jinping-rilancio-dellhigh-tech-cinese/ on Tue, 18 Feb 2025 09:00:32 +0000.